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I have just sold some shares. I have aquired them at diffrent times over the last 20 years. I have no idea how much each has made so am not sure how to submit a Capital Gains estimate.

I am 39 and I feel I have been part of the golden generation, easy credit, missed out on recessions and low house prices. Between 1990 and 2007 have been probably the best years weve ever seen for available money......but has it all been based on a false economy, the economy has been based on buying 1/2/3 cars 1/2/3 computers, 1/2/3 tvs etc etc is this sort of economy sustainable? We dont seem to have addressed this problem of people buying these items with money that we dont actually have, does that mean we are stuck in this cycle of boom and bust? I also believe that we will go back into recession because we have not addressed the debt in this country, until the amounts of credit are controlled we will carry on getting into more and more debt.

My question to you is is capatilism sustainable?

Is there a case long term for structured salaries, income, compensation or whatever other term you care to put on payment for effort both in the Civil Service and in the Private Sector either by a grading system commonly used in many industries and businesses or by taxation up to say 100% on pre-determined levels? Seems to me that something has to be done to halt excessive payments irrespective of the supply/demand cycle.

I am going to university soon for a 5 year course in fashion. i have calculated it to cost about £10,000 a year, which is £50,000 in total. i am wondering is it worth while going to uni if i rack up too much debt and don't get a job after it?

Thanks to Robert for trying to put a balanced picture on the credit crisis, but there's one thing that I wish a few people would acknowledge.

MOST of the people that work for the banks DON'T earn a ridiculous amount of money. I work as a customer facing member of staff who works with the public accross the counter and by phone every day and I'm sick of feeling deamonised by the way this issue is still reported.

For heavens sake I feel like a social parriah and yet I'm in the same boat as most of the rest of the country; working hard to earn less than £20k a year (no bloomin chance of much bonus and if it's anything it's likely to be under £200.00 for sweatting blood).

Like many I manage as best I can but also like some of the people on your show tonight Robert, I can't afford to own my own home and manage what little debt I have as best I can.

Can't you please stop tarring all the people working in the banks with the same brush and acknowledge that not only that it was a small proportion of a specific sector of the industry, and the most of us work bloody hard for our customers and like the rest of the country are just hoping to keep our jobs and get through the next few years of financial difficulty.

David Cameron said today that the countries debt is more than £700b, the labour government bought out certain banks to stop them going under, surely they will be sold off hopefully for a tidy some in the near future, approx how much did it cost to buy into them this will surely pay off a big chunk of the debt.

Hi Mr Peston,
I was surprised that a person of your alledged economic wisdom is still saying that banks lend their depositors money. The banking system is known as fractional reserve or debt based in which 95% of "money" is in the form of bank credit and only 5% exists in tangible form as bank notes and coin. Therein lies the origins of the credit crunch. If there is no debt then there is no money.

Any normal company creating problems (e.g. environmental ones) would be responsible for the resulting costs (e.g. to properly dispose their waste).

Although it is impossible to calculate and to determine to which extend each bank was involved in the creation of this recent economic crisis - it is undeniable that the banks in general caused trouble for everyone.
This collective guilt includes the responsibility of each bank to point out problems within the banking system they all operate in and therefore know best.

So why wasn't at least the emergency help that many banks received from the government handled as a loan which they would have to pay back at a later time including reasonable interest?

How can we expect any changes in the business conduct of banks
if they are not held responsible for their actions?

The UK’s borrowing skyrocketed after we had to bail the banks out. I can understand that and why it was done. However, what I really don’t get is why this won’t come back to us from the banks’ future profits as we’re now shareholders. Once the banks are back in profit can’t the Chancellor sell the shares we own on the open market and recoup our money or is it anticipated that they will not be in that position for a long time?

Capital gains tax needs to sit comfortably against taxation of income so that the one is not distorted into the other to avoid tax. That explains why the CGT rates should be comparable with an individual's marginal income tax rate.

But investment involves a balance between risk and reward - when they manage to keep pace with inflation there is no real gain. Surely only gains above this level represent a taxable capital gain? Investment in company shares allows businesses to grow and employ people and should be treated fairly.

The Government says that everyone will feel the pain from the cuts for many years. BUT the richest, like the multi-millionnaires Cameron, Osborne etc, will not be hit - or if there is an increase in say CGT, not the same extent as those on middle-low incomes.

How can we ensure that the richest pay proportionately more than the poor to get the country out of the current mess its in?

Hi Robert,

With interest rates at 0.5% and inflation at ~5%, I would like to ask whether the current climate is biased towards debtors rather than borrowers... Is it worth saving money and staying away from debt when all that you save in the bank is being eroded by inflation with little interest to counter it unless you take risks i.e. Shares

Do you think this is some sort of solution for the government to 'inflate its way out of debt'?

Finally, is this the reason why house prices haven't come down as much and commodity prices are so high?

Have the baby boomers sold the younger generations down the river?

ie - Do high property prices hugely benefit the boomers and disadvantage the young? Is the vast boomer pensions liability going to financially cripple the younger generations chance of ever retiring? Which generation benefits most from all the extra money we are borrowing and which generation will pay it back? Is the new govt pledge not to touch the health budget (but cut school/university funding) yet another 1-way cash flow from young to old? Did the bank bailout/quantitive easing/low interest rates primarily save boomer pensions/assets, with money that will have to be earned by the younger generation at a later date?

Have heard some rumblings about this, but don't know the stark statistics.

All the focus on cutting spending and reducing the debt is fine, but what about improving productivity, technological innovation, and investment in good growth areas? I have a feeling that not many people including the government have their sights on tackling those problems. Isn't one way avoiding becoming poorer to work hard and innovate?

Your sanitized version of how banks work and only lend what they have in their coffers was perhaps a tadge misleading? With reference to solutrean's comment (No 7) and given your reputation as a harbinger of bad news and hard hitting journalism perhaps a slightly more revealing explanation is called for?

Good Programme. Hi Robert, what I want to know is what is the government doing about the following ?:
‡ The money we contibute to the EU and yet the accounts for the EU have not been signed off for years. A huge ammount of money is not accounted for - which we need
‡ The governments PFI initatives for the railways, hospitals and schools are off-balance sheet - again a huge amount of money which is unaccounted for - which we need
Finally, what I find really ironic is the banks are now risk averse (now they have our money without our approval) yet were happy to join in the Maddoff and other 'sub-optimal' money making schemes. Morever, the harbingers of doom (Risk Analysts) were sidelined by the banks - nice one!! So it could have been prevented, joined up thinking, nah, don't be daft! Will we ever learn?
Regards,
David

Robert - I was somewhat disappointed to hear your explanatiuon on this program of 'how banks work' - quite an incomplete explanation & quite misleading too.

You completely neglected to explain about Leverage/fractional reserve banking/ etc. and how banks ramp up their 'capital', create money out of thin air when they provide loans, as well as other critical aspects when one wants to understand banking.

I feel if more people were told about these aspects of 'normal' banking they may be more inclined to borrow less, save more, & manage their cash better.

You point to the colossal amount of Government plus private debt which now has to be dealt with. I am perplexed to try and understand why, seemingly, no-one in the academic community (economists? accountants?)didn't do the simple arithmetic years before the crunch came which surely would have shown that the total income of both private individuals and government was rapidly becoming quite inadequate to service the ballooning private and public debt in any sensible repayment period.

It is understandable that the banks are not very popular with the public at the moment. Robert's explanation of how the banking system works is a little misleading. Ready cash or high powered money as banks call it is used to ramp up credit into the economy so that virtually all the money in the economy consists of loans in the form of bank credit. This bank credit is created literally out of nothing and eventually has to be paid back with interest. This enevitably creates a situation of unrepayable debt and recession soon follows. Banks make a profit on the different rates of interest they charge and offer on various accounts but these profits are dwarfed by the huge sums they make using the Fractional Reserve or Money Multiplyer mechanism.

Robert we enjoyed the show, I was wondering how you get to get a large bonus in the banking industry

Hello Robert, what is the best area of employment for a young person?

Robert, we liked your haircut who is your hairdresser?

If the financial disaster perpetrated by the immoral machinations of the banks could be physically seen as money flowing out of the economy into the pockets of the few, like the oil flowing out of burst pipe into the Gulf, wouldn't the rhetoric against the banks to 'make good' be more vociferous?
The pollution caused by oil company's around the world, Nigeria springs to mind, has not been as dramatic as the flow in the Gulf, but has been sustained over a long period. Where are the voices calling for the clean up? Union Carbide fought tooth and nail against paying out to its victims in Bhopal, where a complete'clean up' has never taken place. Is the 1st world more important than the 3rd?

Dear Robert,

Not sure if I'm being particularly dim, but when the Bank were given our taxpayers money to keep going, was a repayment plan put in place so that there was a definite structure for paying this money back. I have not heard anything to this effect, yet if we borrow for mortgage, car loan, home improvements, or anything for that matter, we have a repayment schedule, and quite rightly so. Where is the repayment schedule for the Banks please? Thank you.

Dear Mr Peston

As a student in his final year of A levels in a very well repected college I was wondering whether you could give me an insight into how the motor industry in particualar the big market players such as Toyota, GM, Ford and Tata have been affected by the recent recession. In addition, I would also like to hear how you think the recent recession has affected this market and whether it is the most formidable one we have seen
Thanks

Zorays

I was puzzled by your attempt to explain how banking works. In your example you suggested that if they had a theoretical £1bn they would lend it out on a higher interest rate than what they paid the depositors and make profit on the difference.

This is not how banking works and I am amazed that someone in your position could have got this so wrong. To amend your example to reflect actual banking practice, say they had £1bn in deposit, they were then lending out between massively more than that amount, e.g. £30bn! Their rationale was that with assets booming and businesses growing and everyine feeling wealthier - even though it was a complete con - the returns would be even greater and so debt was never going to be a problem. Everyone turned a blind eye to this suicidal practice because of the returns they were getting, however unsustainable they were.

It was this thinking that led to the inevitable credit crunch and why, the banking system will collapse as and when the so-called Quantative Easing stops, which is simply propping up a bursting damn. We have all lived well beyond our means and the lifestyles we enjoyed were unaffordable. Your audience is naively unaware that the debt they have accumulated will never be paid off and the country will go bankrupt.

Similarly, your point about house prices was disingenuous. The only way is down - massively, i.e. 50-70%. Property is out of sync with people's earnings and was the means to facilitate the boom. Either interest rates will soon shoot up as a result of import inflation, and the pound is weak in respective to other currencies, leading to people defaulting on their mortgages; or, as the government cuts jobs, unemployment will snowball, again leading to mortgage defaults and repossessions.

Given that the private sector was not creating jobs in the supposed good times, they are even less likely to do so now in the bad times.

We face a bleak future and your programme failed to convey the seriousness of this situation.

Poor show.

On your short movie on Peston Bank, I think you made an error. It is a serious error. Banks did not trigger the credit crunch or recession. The real trigger was the spike in the oil price from $40 to $147 per barrel. This doubled shipping costs from China to America, and thus put thousands of low paid workers out of work because those Chinese goods became too expensive. If you cannot buy it, you cannot sell it, so trade ceases. Low paid workers were in debt and those debts were bundled up into securities etc. The owners of these securities etc suddenly found out they were worthless. That's when there was a run on the banks because banks owned most of those debts. So the banks were not the cause of the problem. They were merely the end game of an oil crisis. The oil price fell back once demand for it ended, but it is rising again. Up to $80 a barrel in a very short time. Thus this is the key point. Oil is in greater demand than ever before, and new finds can only postpone an oil crunch by a few years at most. Recession after recession should happen from now on since we are in the age of peak oil. If the world consumes the current BP published stock at a rate of 1% per year, it will be rationed by 2046. That's not long. That's only around the corner. If China and India grow this could be much, much lower, more like 10 or 15 years perhaps? When oil becomes expensive, no matter what we do to interest rates, or bank regulations, nothing will help to alter the fact that the days of cheap oil are over. British heavy industry will start to grow again to supply local demand. Tin mininng in Cornwall will come back again. Coal will be resurrected. All the things we did in the age of Queen Victoria, including re-inventing sailing ships and electric cars will come back again. 'History repeats itself, first a tragedy, then a farce.' How farcical it will be to see electric cars charged by expensive nuclear power?

I have been a customer of the Coop Bank for some years.As a retail bank it would seem to be exemplary,no bonuses are paid,it has an ethical policy its shareholders are its members.It is almost never mentioned as an obvious alternative in the current climate of banking greed.I would be interested in hearing why this is the case.

Finally, what I find really ironic is the banks are now risk averse (now they have our money without our approval) yet were happy to join in the Maddoff and other 'sub-optimal' money making schemes. Morever, the harbingers of doom (Risk Analysts) were sidelined by the banks - nice one!! So it could have been prevented, joined up thinking nah, don't be daft! Will we ever learn?

This comment was removed because the moderators found it broke the house rules. Explain.

I agree with the many who have already pointed this out: your explanation of the banking system is deeply misleading.

Given the serious nature of the banking crisis, your omission could
easily be mistaken for propaganda.

If you wish to educate, then educate by teaching the truth.